Credit cards and consumer debt

For consumers, credit cards can appear to be an attractive payment option, and credit card companies are always offering incentives for consumers to use their cards as often as possible. But here are some facts you should know before you reach for the plastic:

  • The average Canadian now owes more than $27,000. That does not include mortgages.
  • Credit cards make it easier for you to spend beyond your means. With cash or debit, when the money runs out, you can't keep spending.
  • Even if you usually pay off your credit card balance, credit card companies have a number of ways to make you pay interest.
  • The credit limit on your cards is unrelated to what you can afford. Staying well below the limit on your various cards doesn't mean you will be able to pay them off.

Credit cards and small business

Credit cards have always been a higher-cost payment option for businesses (1-2% per transaction1 vs. 5-10 cents for Interac Debit). But the problem started getting much worse in 2008 when credit card companies began introducing premium cards. Some of these cards carry fees as high as 3% for vendors. Whether businesses raise prices or simply absorb the cost, excessive use of credit cards hurts business and drives up prices for consumers. Consumers think they are getting free rewards, but the money is coming out of their own pockets.

Go to for more information about the true cost of credit cards

1 American Express cards have always had higher fees than other cards, as high as 4%.